TOWN OF WEST POINT TOWN COUNCIL MINUTES July

RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF AGENERAL OBLIGATION REFUNDING BOND,SERIES 2014, OF THE TOWN OF WEST POINT, VIRGINIA,AND PROVIDING FOR THE FORM, DETAILS AND PAYMENT THEREOFThe Town of West Point, Virginia (the “Town”) is a political subdivision of theCommonwealth of Virginia, and pursuant to the Public Finance Act of 1991, Chapter 26, Title15.2, Code of Virginia of 1950, as amended (the “Act”), the Council of the Town (the “TownCouncil”) is authorized to contract debts on behalf of the Town and to issue, as evidence thereof,bonds, notes or other obligations payable from pledges of the full faith and credit of the Town.The Town wishes to issue a general obligation refunding bond to (i) refund,together with other available funds, the outstanding principal balance of the Town’s GeneralObligation School Note, Series 2012B (the “Prior Note”), the proceeds of which were used tofinance a portion of the costs of HVAC system replacement at West Point Elementary Schooland West Point High School/West Point Middle School (the “Project”) and (ii) pay the costs ofissuing the bond.The Town Council has received proposals from financial institutions inconnection with the purchase of such bond and now wishes to authorize the issuance of suchbond.NOW, THEREFORE, BE IT RESOLVED BY THE TOWN COUNCIL OFTHE TOWN OF WEST POINT, VIRGINIA:Section 1.Authorization of Bond. It is hereby determined to be necessaryand expedient for the Town to issue its general obligation refunding bond in an aggregateprincipal amount not to exceed 5,100,000 (the “Bond”) to refund, together with other availablefunds, the Prior Note and pay the costs of issuing the Bond.Section 2.Selection of Winning Proposal. After consideration of the methodsof sale of the Bond and the proposals received from financial institutions, it is hereby determinedthat it is in the best interest of the Town to accept, and the Town does hereby accept, theproposal of Towne Bank (the “Bank”) to purchase the Bond, such offer being contained in aletter from the Bank (the “Winning Proposal”). The Mayor, the Vice Mayor and the TownManager of the Town, any of whom may act, are each hereby authorized and directed to acceptthe Winning Proposal and to evidence such acceptance by executing and delivering the same tothe Bank.Section 3.Details of Bond. The Town Council hereby authorizes theissuance and sale of the Bond in the form and upon the terms set forth herein. The Bond shall beissued in the form of a single fully-registered bond without coupons designated the “GeneralObligation Refunding Bond, Series 2014”, shall be dated the date of its issuance, shall beregistered as to both principal and interest in the name of the Bank, shall be in a principal amountnot to exceed 5,100,000, and shall be numbered R-1. Interest shall accrue on the Bond from itsdated date until January 15, 2025 at the interest rate per year of 2.40%. On January 15, 2025 andon January 15, 2030, the interest rate will be reset to an interest rate per annum that is equal tothe five-year Federal Home Loan Bank rate then in effect plus fifty basis points. In addition, onJanuary 15, 2030, the Bank has the right in its sole discretion to tender the Bond to the Town forpurchase upon written notice thereof given to the Town on or before October 15, 2029. Intereston the Bond shall be payable semi-annually on each January 15 and July 15, commencingJanuary 15, 2015. Principal shall be payable on each January 15 commencing January 15, 2016and continuing through January 15, 2035. If not sooner paid, all principal of and interest on theBond shall be due and payable on January 15, 2035. The Bond shall be in the form attachedhereto as Exhibit A, with such changes, omissions and insertions as may be approved by BondCounsel and by the Mayor and Vice Mayor, either of whom may act, such approval to beevidenced conclusively by the execution and delivery of the Bond.Interest on the Bond shall be calculated on the basis of a 360-day year consistingof twelve 30-day months. All payments made on the Bond shall be applied first to accruedinterest and then to principal. If the payment date of any payment due under the Bond would fallon a day on which commercial banks are authorized or required to close in the CommonwealthWest Point Town Council – July 29th 2014Page 6 of 16

of Virginia, then payment need not be made on such date, but may be made on the nextsucceeding business day, and if made on such next succeeding business day, no additionalinterest shall accrue.The Mayor and Vice Mayor, either of whom may act, are each hereby authorizedto approve the final principal amount of the Bond, so long as the final principal amount is lessthan or equal to 5,100,000, and to approve the amortization schedule for the Bond based uponthe final principal amount, so long as the weighted average maturity of the Bond shall not exceedtwenty (20) years, such approvals to be evidenced conclusively by the execution and delivery ofthe Bond.Section 4.Redemption Provisions. The Bond will be subject to redemption atthe option of the Town in whole or in part at any time and from time to time on any day at aredemption price equal to 100% of the principal portion of the Bond being redeemed plusaccrued interest to the redemption date. The Town shall cause notice of the call for redemptionidentifying the principal portion of the Bond to be redeemed to be sent by electronic or facsimiletransmission, registered or certified mail, or overnight express delivery, not less than ten (10)days prior to the redemption date, to the registered owner of the Bond.Section 5.Pledge of Full Faith and Credit. The Bond will be secured by thefull faith and credit of the Town. For the prompt payment of the principal of and interest on theBond as the same shall become due, the full faith and credit of the Town are hereby irrevocablypledged. Pursuant to Virginia Code Section 15.2-2624, there shall be levied and collected anannual tax upon all taxable property in the Town subject to local taxation sufficient to providefor the payment of the principal of and interest on the Bond as the same shall become due, whichtax shall be without limitation as to rate or amount and shall be in addition to all other taxesauthorized to be levied in the Town to the extent other funds of the Town are not lawfullyavailable and appropriated for such purpose.Section 6.Execution and Delivery of Bond. The Mayor and the Vice Mayor,either of whom may act, are each authorized and directed to execute the Bond. The Town Clerkand any Deputy Clerk, either of whom may act, are authorized and directed to execute the Bond,to affix the seal of the Town to the Bond, to attest the seal and then to deliver the Bond to theBank upon payment of the purchase price of 100% of the principal amount thereof.Section 7.Designation for Purchase by Financial Institutions. The Townhereby designates the Bond as a “qualified tax-exempt obligation” eligible for the exceptionfrom the disallowance of the deduction of interest by financial institutions allocable to the cost ofcarrying tax-exempt obligations in accordance with the provisions of Section 265(b)(3) of theInternal Revenue Code of 1986, as amended (the “Code”). The Town does not reasonablyanticipate that it and any “subordinate entities” will issue more than 10,000,000 in qualified taxexempt obligations during calendar year 2014, and the Town will not designate more than 10,000,000 of qualified tax-exempt obligations in calendar year 2014.Section 8.Registration and Transfer of Bond. The Town Manager isappointed paying agent and registrar for the Bond (the “Registrar”). The Registrar shall maintainregistration books for the registration and registration of transfers of the Bond. Uponpresentation and surrender of the Bond at the office of the Registrar, together with an assignmentduly executed by the registered owner or its duly authorized attorney or legal representative insuch form as shall be satisfactory to the Registrar, the Town shall execute and deliver inexchange, a new Bond having an equal aggregate principal amount, of the same form andmaturity, bearing interest at the same rate and registered in the name as requested by the thenregistered owner thereof or its duly authorized attorney or legal representative. Any suchtransfer or exchange shall be at the expense of the Town, except that the Registrar may chargethe person requesting such transfer or exchange the amount of any tax or other governmentalcharge required to be paid with respect thereto.Section 9.Bond Purchase Agreement. Certain additional terms of theWinning Proposal may be set forth in a Bond Purchase Agreement between the Town and theBank (the “Bond Purchase Agreement”). The Mayor, the Vice Mayor and the Town Manager,any of whom may act, are each authorized to execute and deliver the Bond Purchase Agreementon behalf of the Town.Section 10.Further Actions. The Mayor, the Vice Mayor, and theWest Point Town Council – July 29th 2014Page 7 of 16

Town Manager, and such officers, employees and agents of the Town as may be designated byany of them, are authorized and directed to take such further actions as they deem necessaryregarding the issuance and sale of the Bond including, without limitation, the execution anddelivery of closing documents and certificates, including IRS Form 8038 G and a Non Arbitrageand Tax Matters Certificate (the “Tax Certificate”). All such actions previously taken by theMayor, Vice Mayor, the Town Manager, or such officers, employees and agents are herebyapproved, ratified and confirmed.The Town Council covenants on behalf of the Town that (i) the proceeds from theissuance of the Bond will be used as set forth in the Tax Certificate, (ii) the Town shall complywith the other covenants and representations contained in the Tax Certificate, and (iii) the Townshall comply with the provisions of the Code, so that interest on the Bond will remain excludablefrom gross income for federal income tax purposes and that the Bond will maintain its status as a“qualified tax-exempt obligation.”Section 11.Selection of Bond Counsel. The Town Council hereby consents toTroutman Sanders LLP serving as Bond Counsel to the Town in connection with the issuance ofthe Bond.Section 12.Election Under the Act. The Town Council elects to issue theBond under the provisions of the Act and without regard to the Town Charter.Section 13.Redemption Date for Prior Note. The Council hereby calls for theoptional redemption of the Prior Note on the date of the issuance of the Bond (the “RedemptionDate”) at a redemption price equal to 100% of the outstanding principal amount thereof plusaccrued interest to the Redemption Date.Section 14.Use of Proceeds of Bond and Prior Note. The principal amountof the Bond does not exceed the amount necessary to retire the Prior Note and pay the costs ofissuance of the Bond. The proceeds of the Prior Note were used to pay a portion of the costs ofthe Project and the costs of issuance of the Prior Note. The remaining proceeds of the Prior Noteare being used to pay the portion of the redemption price of the Prior Note not funded by theproceeds of the Bond and thus to downsize the Bond issue.Section 15.Discharge upon Payment of Bond. If the Bond shall have becomedue and payable in accordance with its terms, shall have been fully refunded from the proceedsof refunding bonds issued by the Town and the full amount of the principal and interest so dueand payable upon the Bond then outstanding shall have been paid, or sufficient cash or directobligations of, or obligations the principal of and interest on which are unconditionallyguaranteed by, the United States of America shall be held by the Town or by an escrow agentselected by the Town for such purpose, at the time and in the manner provided in this Resolution,then all covenants, agreements and other obligations of the Town to the holder of the Bond underthis Resolution shall cease, terminate and be void and the Town shall be discharged from itsobligations hereunder. Upon the deposit of such cash or obligations with the Town or escrowagent, the Town or escrow agent may request a report from certified public accountants,actuaries or other similar professionals, addressed to the Town or escrow agent, to the effect thatthe cash and the proceeds to be received from such obligations will be sufficient, withoutreinvestment, to provide for the payment of the principal of and interest on the Bond when due.In the event that all of such cash and obligations are not required for the paymentof the principal of and interest on the Bond, such excess may be used by the Town for any lawfulpurpose.Notwithstanding anything to the contrary contained herein, any defeasance anddischarge hereunder shall not be deemed to release the Town from its obligations to pay theprincipal of and interest on the Bond as contemplated herein until the date the Bond is paid infull. In addition, such defeasance and discharge shall not terminate the obligations of the Townto comply with the tax laws pertaining to the Bond until the date the Bond is paid in full.Section 16.Financial Statements and Fees. The Town agrees to provide itsaudited financial statements to the Bank, or any subsequent registered owner of the Bond, eachyear within 270 days of its fiscal year end. The Town agrees to pay the legal fees of counsel tothe Bank, subject to a maximum fee of 2,500.West Point Town Council – July 29th 2014Page 8 of 16

Section 17.Arbitrage Covenants.(a)No Composite Issue. The Town represents that there have not beenissued, and covenants that there will not be issued, any obligations that will be treated as part ofthe same issue of obligations as the Bond, within the meaning of the Code.(b)Not an Arbitrage Bond. The Town covenants that it shall not take or omitto take any action the taking or omission of which will cause the Bond to be an “arbitrage bond”within the meaning of Section 148 of the Code, or otherwise cause interest on the Bond to beincludable in the gross income for federal income tax purposes of the registered owner thereofunder existing law. Without limiting the generality of the foregoing, the Town shall comply withany provision of law which may require the Town at any time to rebate to Town receives anopinion of nationally recognized Bond Counsel that such compliance is not required to preventinterest on the Bond from being includable in the gross income for federal income tax purposesof the registered owner thereof under existing law. The Town shall pay any such required rebatefrom its legally available funds the United States any part of the earnings derived from theinvestment of the gross proceeds of the Bond, unless theSection 18.Limitation on Private Use; No Federal Guaranty. The Towncovenants that it shall not permit the proceeds of the Bond to be used in any manner that wouldresult in (a) ten percent (10%) or more of such proceeds being used in a trade or business carriedon by any person other than a state or local governmental unit, as provided in Section 141(b) ofthe Code, (b) five percent (5%) or more of such proceeds being used with respect to any outputfacility (other than a facility for the furnishing of water), within the meaning of Section 141(b)(4)of the Code, or (c) five percent (5%) or more of such proceeds being used directly or indirectlyto make or finance loans to any persons other than a state or local governmental unit, as providedin Section 141(c) of the Code; provided, that if the Town receives an opinion of nationallyrecognized Bond Counsel that any such covenants need not be complied with to prevent theinterest on the Bond from being includable in the gross income for federal income tax purposesof the registered owners thereof under existing law, the Town need not comply with suchcovenants.The Town represents and agrees that the Bond is not and will not be “federallyguaranteed,” as such term is used in Section 149(b) of the Code. No portion of the payment ofprincipal of or interest on the Bond is or will be guaranteed, directly or indirectly, in whole or inpart by the United States or an agency or instrumentality thereof.The Town has complied, with respect to the Prior Note, with the limitation onprivate use and the prohibition against a federal guaranty, as described in this Section 18.Section 19.Limitation of Liability of Officials of the Town. No covenant,condition, agreement or obligation contained herein shall be deemed to be a covenant, condition,agreement or obligation of any officer, employee or agent of the Town in his or her individualcapacity, and no officer of the Town executing the Bond shall be liable personally on the Bondor be subject to any personal liability or accountability by reason of the issuance thereof. Noofficer, employee or agent of the Town shall incur any personal liability with respect to any otheraction taken by him or her pursuant to this Resolution, provided he or she acts in good faith.Section 20.Contract with Bank. The provisions of this Resolution shallconstitute a contract between the Town and the Bank for so long as the Bond is outstanding.This Resolution may not be amended by the Town in any manner without the consent of theBank, except to cure any defect, error, omission or ambiguity herein.Section 21.Filing of Resolution. The Town Clerk is hereby authorized anddirected to cause a certified copy of this Resolution to be filed with the Circuit Court of theCounty of King William, Virginia.Section 22.Effective Date. This Resolution shall take effect immediately.Exhibit A – Form of the BondWest Point Town Council – July 29th 2014Page 9 of 16

EXHIBIT AR-1 UNITED STATES OF AMERICACOMMONWEALTH OF VIRGINIATOWN OF WEST POINT, VIRGINIAGENERAL OBLIGATION REFUNDING BOND, SERIES 2014INTEREST RATE2.40% per year(subject to resetas provided herein)MATURITY DATEDATED DATECUSIPJanuary 15, 2035August , 2014NoneREGISTERED OWNER:PRINCIPAL AMOUNT:TOWNEBANKAND 00/100 DOLLARSFOR VALUE RECEIVED, the TOWN OF WEST POINT, VIRGINIA (the “Town”), apolitical subdivision of the Commonwealth of Virginia, hereby acknowledges itself indebted andpromises to pay, from the sources described below, to the

West Point Town Council – July 29th 2014 Page 2 of 16 Andrea Erard, the Town Attorney advised that she appreciates Milestone’s willingness to work with the Town by providing a thirty square foot area, however that may not be a